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Nuclear Power - Dawn of a New Life? Interest Revives, but Challenges Remain
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January 14, 2008
(Reprinted with permission from the Journal of the American College of Construction Lawyers, Volume 1, Number 2, Summer 2007. ©2007 Thomson/West. For additional information about this publication, please visit west.thomson.com.)
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By Kevin O'Brien
Thelen Reid Brown Raysman & Steiner LLP
Introduction
Almost 25 years ago, the nuclear power industry appeared headed for extinction. Beset by unprecedented construction cost overruns, unpredictable regulatory review processes, uncertain investment return, constructed plants that never came on-line, a poor public image for operational safety, and two highly publicized and nearly catastrophic accidents at Three Mile Island and Chernobyl, the industry had succeeded in losing favor on Wall Street, Main Street and on Capitol Hill. New projects were canceled throughout the United States, and plans were advanced to begin the decommissioning of existing plants. The industry's prospects for the future looked dim as engineering schools produced fewer and fewer nuclear engineers.
Yet, in the ensuing years, the industry, guided by more aggressive oversight from the Nuclear Regulatory Commission (NRC), went about addressing the operational safety issues. Slowly but surely the nuclear power industry built an increasingly impressive record of safety and efficiency. Meanwhile, the increasing cost of traditional fossil fuels, their less reliable supplies and increasing concerns about emissions, including carbon emissions, have, together, served to make fossil power an increasingly less attractive power source to meet the ever-growing energy needs of the future. And while alternative energy sources, such as wind and solar, have been advanced, they have not demonstrated the ability to be a large-scale energy source for meeting future power generation needs.
As a result of these convergent developments, the prospects for a rebirth of the nuclear power industry have never been brighter. Heightened demand for a large-scale power source that is not dependent on more problematic fossil fuel supplies as well as the need to anticipate increased government action to limit carbon emissions that are endemic to fossil-fueled plants have combined to create an environment in which nuclear power is increasingly viewed as a viable solution to increasing global energy demands.
While growth in the domestic U.S. nuclear market has remained largely dormant for the last two decades, internationally, nuclear power has remained a major source for new power production. This is particularly true in those nations experiencing the highest growth rates, such as China and India, as well as those countries that have strategically decided to rely heavily on nuclear power, such as France, South Korea and Japan. Internationally, the nuclear power market is anticipating continued growth. China alone is anticipating the construction of more than 30 new nuclear plants by 2020.
Domestically, the political climate has changed dramatically, culminating with the recent enactment of the Energy Policy Act of 2005 (Energy Act). Driven primarily by concern over the United States' dependency on less reliable foreign fuel sources, the Energy Act established significant incentives for increased private investment in new nuclear plants. Concurrently, the NRC has set in place new, more streamlined and, theoretically, more predictable regulatory review processes for new nuclear license applications. And finally, the nuclear power industry has embarked on efforts at standardization of design, cooperation on joint regulatory applications and increased risk-sharing among the design, vendor and construction participants.
Despite these improvements, major impediments may remain. The issue of spent fuel disposal still lacks a long-term solution, and the national political climate remains untested with respect to an actual application for a new plant license. Moreover, the prospects for rebirth will depend significantly on the ability of a next generation of plants to meet regulatory, operational and financial targets and to do so, domestically, with a work force that has had very little recent experience with new nuclear plant construction. The nuclear industry's credibility will be tested, and the pressures will be great to establish early success. Yet, it is undeniable that the industry's prospects are significantly improved from those that existed 25 years ago.
In light of these developments, this article addresses the status of the nuclear industry, explains the legislative, regulatory and legal developments that have created the new prospects for growth, and explains the legal and practical impediments that still remain.
Current State of Nuclear Power
Recent History
At the advent of commercial nuclear power in the early 1950s, Atomic Energy Commission Chairman Lewis Strauss saw in nuclear power the promise of energy "too cheap to meter." 1/ Without question the operating costs of nuclear energy are low relative to other generating sources. The average electricity production cost in 2005 for nuclear energy was 1.72 cents per kilowatt-hour, for coal-fired plants 2.21 cents, for oil 8.09 cents and for natural gas 7.51 cents. 2/ But even in Strauss' day, his claim was recognized as hyperbolic when factoring in nuclear power's large-scale, front-end, capital intensive construction costs and back-end issues relating to the disposal of nuclear waste. 3/
Of the 443 nuclear reactors worldwide, the United States currently has 104 commercial nuclear generating units fully licensed by the NRC, with 103 generating baseload power to the nation's grid. 4/ Although the United States has the most nuclear capacity of any nation, no new commercial reactor has come online since May 1996. 5/ The industry faced a dramatic downturn due to huge cost overruns driven by construction and design issues inherent in plants designed one at a time from the ground up 6/; operating delays driven, in substantial part, by a cumbersome regulatory process; high interest rates; and the accidents at Three Mile Island and then Chernobyl. Some 96 nuclear plants were canceled in the early 1980s. As of January 2004, four nuclear power plants have been decommissioned and their operating licenses terminated, and 19 nuclear power plant units have been permanently shut down and are in some phase of the decommissioning process.
The Nuclear Power Industry Today
Despite these many setbacks, the nuclear power industry has proven resilient. Although prospective plants were canceled and several poor performing plants were shut down, the remaining plants have established impressive records of reliability and cost-effectiveness. Prodded by a more aggressive NRC oversight, the quality of plant operations has improved. The power capacity of the existing plants has been expanded through upgrades to the existing plants. As a result, the cost-effectiveness of the existing plants has become more pronounced as the costs for traditional fuels have increased and the requirements for pollution abatement have become more costly.
Today, the nuclear landscape is far from bleak. Nuclear power is a major grid contributor, producing nearly 20 percent of the nation's electricity supply and operating at a nearly 90 percent capacity factor - up from 60 percent less than 20 years ago. 7/ Plant efficiency is up due to higher output and fewer shutdowns for maintenance or safety problems. 8/ Nuclear power plant reliability as measured by capacity factor - the percentage of electricity actually produced compared with the total potential electricity that the plant is capable of producing - significantly exceeds the reliability of all other power generating sources. The average capacity factor for U.S. nuclear plants was 89.3 in 2005 compared with coal at 72.6 percent, natural gas at a range of 15.6 to 37.3 percent, heavy oil steam turbine at 29.8 percent, hydroelectric at 29.3 percent, wind at 26.8 percent, solar at 18.8 percent, and geothermal at 75.5 percent. 9/
While new plants have not been pursued, U.S. commercial nuclear capacity has increased in recent years through a combination of license extensions and uprating (upgrading) of existing reactors. 10/ License extension likely will be the rule for most of the currently operating nuclear plants. The first 40-year operating license issued by the NRC was to have expired in 2006, and approximately 10 percent of the existing operating licenses are set to expire by 2010. The NRC established the 40-year license term, however, based on economic and antitrust considerations, not on technical limitations of the plants themselves. 11/ As a result, for the efficiently operating nuclear plants, licensing renewal makes eminent sense and is likely to be pursued.
The license renewal process began in 1982 when the NRC, anticipating interest in license renewal, first held a workshop on nuclear power plant aging. 12/ After nearly 10 years of NRC research and in consultation with the nuclear industry, the first license renewal rule was published in 1991. 13/ Following a demonstration program to apply the new rule to pilot plants, the NRC amended the rule in 1995 to create a simpler, more consistent and predictable rule. 14/ The renewal process takes about 30 months to complete. Baltimore Gas & Electric (now Constellation Energy) was the first to seek a 20-year license renewal in April 1998 on the two-unit Calvert Cliffs plant and was the first to receive a renewed license in March 2000. As of January 2007, the NRC has approved license renewals for 48 reactors. 15/ The NRC has received renewal filings for 8 more reactors, and 26 plants have officially informed the NRC that they expect to apply for licensee renewal over the next six years. Essentially, all of the nation's operating reactors are seeking license extensions.
In addition to license renewals, the process of "uprating" has a significant impact on nuclear's share of the domestic grid. Power uprates are a means of increasing the power output of nuclear plants, typically through the use of more highly enriched uranium fuel. They have been carried out since the 1970s through a process that requires operating license amendments. 16/ Power uprates generally range from less than 2 percent to as high as 20 percent and fall into three general categories depending on the kinds of modifications and/or replacements necessary to accommodate the desired power increases. 17/ They are: 1) recapture power uprates; 2) stretch power uprates; and 3) extended power uprates. As of July 2004, uprating resulted in a gain of approximately 12,548 MWt (megawatts thermal) or 4,183 MWe (megawatts electric), which the NRC estimates is the equivalent of four nuclear power plant units. 18/ The NRC currently has proposals for power uprates through 2009, which according to the Department of Energy (DOE), if implemented, would increase that nation's nuclear capacity by more than the construction of any new reactor design now under construction. 19/ But, because the U.S. nuclear fleet is now approaching a real capacity-factor ceiling, the industry's ability to produce significant future increases in KWh generated will be limited unless new reactors are built. 20/
International Status of Nuclear Power
Internationally, nuclear power is expanding. As of January 2007, 30 countries were operating 435 nuclear plants for electricity generation. Some 29 new nuclear plants were under construction in 12 countries. 21/ Of the 339 plants existing outside the United States, 171 have been built since 1980 (when plant cancellation was rampant in the United States) and 20 have been built since 2000. 22/ These events confirm DOE's assessment that, "whether the U.S. builds new plants or not, other nations are and will." 23/ Today, 10 nations obtain 40 percent or more of their electric power from nuclear plants. France leads all nations in percentage reliance on nuclear power and, in the span of 20 years, has transitioned from 15 percent of its electric capacity generated by nuclear power to almost 80 percent. 24/ China plans to add more than 30 new nuclear plants by 2020 to the 11 currently in operation or under construction. Japan relies on nuclear for 30 percent of its electric power and has plans for significant expansion. India has a goal to supply 25 percent of its electricity from nuclear power by 2050. 25/ Current and announced global construction includes 13 nuclear units under construction in Asia and one in Finland. Japan and Korea are planning to start construction on up to 14 more nuclear units between 2005 and 2011. U.S. manufacturers and fabricators are providing equipment and prefabricated modules for the Asia units under construction. 26/ These increased production orders reflect the ever-increasing demand for electricity worldwide and in the United States and a recognition that nuclear power will be a major global generation source for decades to come.
Nuclear Power in the U.S. - Prospects for Growth
The National Energy Policy
At the start of his first term in office, President Bush called on Vice President Cheney to head the National Energy Policy Development Group "to develop a national energy policy designed to help the private sector, and as necessary, state and local governments, promote dependable, affordable, and environmentally sound production and distribution of energy for the future." 27/ The task force's findings, a long-term, comprehensive strategy including more than 100 recommendations, were reported in 2001 and constitute the National Energy Policy (NEP). The NEP has shaped the energy-related legislative reforms and government actions over the last six years.
The NEP is organized around five specific national goals. They are: 1) modernize conservation efforts; 2) modernize the nation's energy infrastructure; 3) increase domestic energy supplies; 4) accelerate the protection and improvement of the environment; and 5) increase the nation's energy security. With respect to the third goal, the NEP projects a sharp increase in electricity demand in the coming decades. The NEP reports that the United States will have to build between 1,300 and 1,900 new power plants over the next two decades - an average of 60 to 90 plants a year - to meet the nation's needs. 28/ Coal and natural gas will continue to play a significant role in electricity generation in coming decades. But the environmental hazards associated with coal, most particularly carbon-emissions, and the volatility of natural gas prices necessitate increased capacity from a mix of generating sources. Accordingly, the expansion of nuclear power is a major component of the NEP. 29/
Economic Competitiveness
The NEP largely addresses increases in nuclear capacity through relicensing and uprating. However, to maintain nuclear's 20 percent share of electricity generation, the DOE projects that new nuclear plants must come online at a rate of 3 to 4 a year starting in 2015. 30/ Because no nuclear plants had been built in many years and none were slated for construction, DOE, in consultation with industry, initiated a number of studies to identify the obstacles and risks of building new nuclear plants and to develop the technical and regulatory foundation for the next generation of plants. 31/
The DOE studies concluded that the most significant obstacle to new nuclear plant deployment is economic competitiveness. 32/ Once in operation, electricity generated by nuclear power is competitive with coal and natural gas. 33/ And in coming years, with the negative impact of carbon-emissions on the costs from coal-generated electricity, nuclear promises to be more economical. But nuclear plants are capital-intensive and require substantial investments in time and money before plants realize returns. Historically, the uncertainties associated with the final cost, the time for completion and the need for regulatory approval of operation of new nuclear plants served to discourage new plant investment. 34/ More recently, these uncertainties have become more pronounced as the level of U.S. experience in the construction of new nuclear plants continues to decline.
A 2004 University of Chicago study, sponsored by DOE, analyzed costs of nuclear-generated electricity, factoring in estimated capital costs. 35/ The study generally concluded that nuclear could favorably compete with gas- or coal-fired plants if the plants could achieve operations within five years of commencement. Based on average levels of initial capital investment, the study reported that the levelized cost of electricity (LCOE) for coal was in the range of $33 to $41 per MWh and $35 to $45 per MWh for gas-fired production. For new nuclear plants, the LCOE was assessed at $31 to $46 per MWh assuming a five-year construction and regulatory approval process.
Control of initial capital costs is, therefore, the critical factor in establishing nuclear power as the cost effective solution to the nation's power needs. However, it has been estimated that the cost of construction for the first of the next generation of domestic nuclear plants could vary by as much as 35 percent. 36/ The variation in capital costs is reasonably anticipated given the "first of a kind" technology that is involved, the limited relevant nuclear experience in the domestic engineering and construction industries, and the untested regulatory approval processes for the types of plants involved. 37/ And while it is reasonable to expect that some of the premium costs for the first plants will disappear as succeeding plants are undertaken, those types of economics historically have been difficult for the nuclear industry to achieve. Nevertheless, the resurgence of the domestic nuclear power industry will depend significantly on establishment of early credibility in the control of capital costs and reduction in the time to market for the first of the next generation of plants. 38/
The DOE studies indicate that reducing time-to-market is best achieved through: 1) an aggressive strategy combining financial incentives and government subsidies to encourage and reward first movers into the market; 2) refinements in the regulatory process for siting and licensing plants; and 3) improvements by industry, including standardized reactor design, modular construction and improved safety features.
Energy Policy Act of 2005
The Energy Act 39/ constitutes the implementing legislation for many of the NEP goals. Among its provisions, the Energy Act provides financial incentives to encourage investment in new nuclear power plants. The Energy Act directly addresses many of the obstacles to new nuclear power plant development spotlighted by industry and DOE. With $8 billion in subsidies and incentives, the Energy Act encourages new investment and likely will jumpstart efforts for new plant construction.
The three key provisions of the Energy Act facilitating new nuclear plant development are federal loan guarantees, a production tax credit and "standby support" to insulate applicants from licensing delays. Each of these key provisions is explained below.
Loan Guarantees
The Energy Act provides federal loan guarantees to support development of new projects that "avoid, reduce, or sequester air pollutants or [human-made] emissions of greenhouse gases." 40/ Advanced nuclear power facilities are among the eligible project categories, which also include renewable energy, advanced fossil energy and hydrogen fuel cell technology. The loan guarantees will span the shorter of 30 years or 90 percent of a project's life and may cover up to 80 percent of the estimated project cost. These guarantees will be financed through the Energy Loan Guarantee Fund, and the Energy Act describes alternative means to finance the cost of the loan guarantee: either the project developer pays the cost of the loan guarantee into the fund, or the Secretary of Energy requests an appropriation for that amount and the project developer repays the amount over the life of the project. 41/ As most new power plants likely would be financed by bonds, loan guarantees may help to reassure bond investors. 42/
Production Tax Credit
The second key provision designed to encourage investment in new nuclear facilities is a production tax credit. Energy Act §1306 provides a 1.8 cent per kilowatt hour tax credit up to a national capacity limitation of 6,000 megawatts. The production tax credit is available to eligible facilities for the first eight years of operation. To qualify for the tax credit, however, construction must begin before January 2014, and the facility (using a reactor design approved by the NRC after December 31, 1993) must be placed into service before January 1, 2021. 43/ Further rewarding early investment is the qualification requirement that, in order to be considered in the national capacity limitation, an application for a construction/operating license for the facility must be filed with the NRC on or before the later of: 1) December 31, 2008; or 2) the date on which the aggregate capacity of all of the advanced nuclear facilities for which construction/ operating license applications have been filed with the NRC first equals or exceeds 6,000 megawatts. 44/
Standby Support
The Energy Act provides a third key financial incentive for development of new nuclear power plants through the provision of what is called "standby support." Under the Energy Act, "standby support" essentially is federal insurance for increased costs attributable to certain regulatory and litigation delays as to which the project developer is not at fault. Delays covered by standby support are those caused by the NRC, such as untimely review of inspections, test results, analyses and acceptance criteria or in the event of pre-operational NRC hearings. 45/ In addition, federal standby support covers certain costs attributable to delays related to litigation beyond the control of the plant developer, such as challenges to enjoin construction or operation of the plant. The federal standby support insurance covers principal and interest on debt (primarily for construction delays) as well as certain replacement power costs (primarily for operational delays). 46/ The first six eligible reactors will share all of the $2 billion in coverage in the event of licensing or litigation-related delays of more than 180 days. The first two reactors can get 100 percent coverage of eligible costs up to $500 million each for covered delays; the next four new reactors would have 50 percent coverage, up to a total of $250 million each. This provision facilitates investment by rewarding earliest proponents. As Energy Secretary Bodman reported,
Providing federal risk insurance is an important step in speeding the nuclear renaissance in this country. Companies that take risks and enter the market first after a 30-year hiatus should not be penalized by hold-ups that are not their fault. This risk insurance protects them against bureaucratic and legal issues that delay their start-up. 47/
The Department of Energy's Final Rule on contracts for standby support was issued on August 11, 2006, and adds a new Part 950 to Title 10 of the Code of Federal Regulations. Entering into a conditional agreement is the first step of the process, and to be eligible, a project sponsor must have on file a docketed combined construction and operation license application (COL) with the NRC. The rule also establishes the process and requirements under which conditional agreement can be converted into a standby support contract. Principally, there are nine conditions precedent to obtaining a standby support contract, and the first two applicants to meet all nine conditions will receive 100 percent standby support coverage. The requirements are: 1) entering into a conditional agreement; 2) issuance of a COL by the NRC; 3) documentation of the commencement of construction (pouring of safety-related concrete of the reactor building); 4) documentation of all applicable federal, state or local permits; 5) documentation of required insurance; 6) payment of required fees into the program and grant accounts (this is the "premium" associated with obtaining coverage; DOE will use project-specific information such as timing and amount of the applicant's debt-service to develop an initial estimate at the time of the conditional agreement); 7) establishment of a proposed schedule for completing the inspection, testing, analyses and acceptance criteria; 8) development of a detailed systems-level construction schedule; and 9) completion of a detailed financing plan for the project. 48/
Among events that are excluded from coverage as being within the control of the applicant or normal business risks are: 1) failure of sponsor to take any action required by law, regulation or ordinance; 2) project planning and construction problems, strikes or weather delays; 3) seizure or destruction of property by order of governmental action; 4) war or military action; 5) government acts or decisions, including the failure to act, by any government (excluding NRC's covered events); and 6) supplier or subcontractor delays in performance. 49/ Other notable regulations are the two-step process for making a claim 50/; the dispute resolution process, which calls for mediation and final appeal before the Civilian Board of Contract Appeals 51/; and the Energy Secretary's audit authority and attendant right of access to pertinent records and documents. 52/
Standby support protection was adopted as another means of encouraging investment by reducing uncertainty in the licensing process. The protection is available to any eligible plant in addition to the incentive programs outlined above. 53/ This type of insurance is unique from other government insurance or loan programs in that the number of eligible participants is very small and the events covered include agency activities. 54/ The program is a direct response by Congress to agency and industry concerns over an untested regulatory scheme for new nuclear power plants and the significant risk of delay. 55/
Price-Anderson Act Renewal
In addition to subsidies, the Energy Act contains other provisions to promote new development of nuclear power. Among those provisions is extension of the Price-Anderson Act. 56/ This law, first enacted in 1957, was designed to ensure that adequate funds would be available to satisfy liability claims by members of the public for personal injury and property damage in the event of a catastrophic nuclear accident. 57/ Since its inception, the Price-Anderson Act has been an important component in the government's policy to encourage private development of commercial nuclear power. In the early years of the commercial nuclear industry, potential nuclear liability exposure was thought to be too great for private industry to accept. Accordingly, the industry would not proceed with widespread private investment in new nuclear power plants without government support, including a limitation on the amount of liability a utility or reactor manufacturer would incur in the event of a nuclear accident. 58/
Energy Act §602 extends liability limitation for 20 years to December 31, 2025. This extension ensures that the next generation of nuclear power plants has the same financial protection from liability as existing reactors. Among amendments to the Price-Anderson Act were an increase in the liability limit from $100 million to $500 million and an increase in the annual retrospective premium assessed on all reactors following a nuclear accident.
Additional Provisions
Among its other provisions specific to nuclear power, the Energy Act strengthens requirements for security of nuclear facilities, modifies the tax treatment of nuclear de-commissioning funds in recognition of market-based rates in place of cost-based rates, and authorizes research and development projects that include development of an advanced nuclear cogeneration reactor at the Idaho National Laboratory. The Energy Act addresses waste disposal by calling for DOE to identify for Congress a permanent disposal facility for all Greater-Than-Class-C waste. 59/ The act also eliminates NRC's authority and responsibility to conduct antitrust review of applications for new nuclear power plants. 60/ Twelve utilities, including the Tennessee Valley Authority (TVA), now own and operate more than 75 percent of the total nuclear capacity and about two-thirds of the plants. 61/ The NRC anti-trust review exemption likely reflects the growing recognition that the industry's ability to overcome the challenges to new nuclear projects will depend heavily on industry collaboration, including ownership consolidation.
Advances in NRC's Regulatory Process
Although the Energy Act's significant incentive provisions should not be minimized, financial incentives alone do not address the major impediments to a resurgence in nuclear power. For nuclear power to be more economically viable, changes had to be made to the regulatory approval process so as to create a more streamlined and predictable process.
Currently operating nuclear power plants have been licensed under a two-step process under which a facility must first obtain a construction permit and then an operating license as set forth in 10 CFR Part 50. An indispensable component to the development of new nuclear power plants is speeding up this process and minimizing the uncertainty that has plagued the industry for decades. In an effort to improve regulatory efficiency and add greater predictability to the process, NRC established alternative licensing processes 62/ that include certification of standardized reactor designs, early site permits and a combined construction/operation (COL) application process. These processes, described in more detail below, are designed to work in tandem to produce a streamlined application for a combined license (construction and operation) that would incorporate by reference a pre-certified reactor design and provide for an early site permit.
Efficiency is not the only advantage of such a process. NRC itself has noted that the streamlined process has additional advantages in that "issues resolved during the design certification rulemaking and the early site permit hearing processes are precluded from reconsideration at the combined license stage." 63/ Under this approach, a determination of approval for a reactor design would be binding on all subsequent applications employing the same design, thereby eliminating the need to "re-invent the wheel" with each NRC license application. With the momentum provided by National Energy Policy and the Energy Act, these alternative processes are now being tested. Each will be described in turn.
Design Certification
Design certification is a significant improvement to the regulatory process. Under this process, NRC certifies standard plant designs that can be used as pre-approved designs in subsequent COL applications. NRC approves and certifies standard nuclear plant design through a rulemaking, independent of a specific site. In general terms, a design certification application addresses what is essentially a complete nuclear plant design, with the exception of site-specific design features such as intake structures and ultimate heat sink. 64/ NRC characterizes the issues resolved in a design certification rulemaking as being "subject to a more restrictive change process than issues that are resolved under other licensing processes." 65/ Certification is valid for 15 years, and "the NRC cannot modify a certified design unless it finds that [it] does not meet the applicable regulations in effect at the time of the design certification, or [unless] it is necessary to modify the design to assure adequate protection of the public health and safety." 66/
Design certification impacts more than the licensing process. Standardized design, particularly incorporating modular construction, will reduce costs as projects benefit from experience gained on earlier plants as well as from improved quality control and shorter field construction schedules. 67/
Two new reactors have been identified for design certification and utilization in the first combined license applications expected in the next two years. The first, the Westinghouse AP1000, is an Advanced Boiling Water Reactor, based closely on AP600 design that was certified in 1999. The final design approval will expire in 2021 unless NRC extends the date. The second combined license application, submitted in August 2005 and likely to be certified by early 2008, is the General Electric Economic Simplified Boiling Water Reactor. Pre-application reviews also have been submitted by Atomic Energy of Canada for its ACR-700 design, a 700 MWe light-water cooled reactor with two steam generators and four heat transport pumps; by Framatome, a subsidiary of Areva, for its Areva EPR, currently being constructed at the Olkiluoto site in Finland; by Westinghouse for a 335 MWe advanced light water reactor design that is thought to have more utility outside the United States for small-scale generation needs; and by PBMR for its Pebble Bed Modular Reactor.
Early Site Permits
With an early site permit, an applicant can obtain approval for a reactor site without specifying the design of the reactor(s) to be built on the site. As set out in 10 CFR §52.1-113 (2006), this licensing alternative allows applicants to have the "safety, environmental protection, and emergency preparedness" aspects of prospective sites reviewed independent of a specific nuclear plant design. Once issued, an early site permit is initially valid for at least 10 and no more than 20 years and can be renewed for an additional 20 years. To date, under the auspices of the DOE's "Nuclear Power 2010" initiative, three early site permits have been submitted, each at sites where there already are nuclear reactors: by Entergy for its Grand Gulf (Mississippi) site; by Exelon for its Clinton (Illinois) site; and by Dominion for its North Anna (Virginia) site. After a four-year review, NRC approved Exelon's early site permit application on March 8, 2007. Final NRC decisions on the other two applications are expected to follow.
Combined Construction/Operation Application Process
Existing nuclear plants were licensed by NRC under a two-step license review process. The first step focused on design and construction issues, and the second step focused on operations (i.e., emergency plans, management review and the like). The problem with this approach was that design and construction could proceed before operational issues were resolved by the NRC. This type of an approach contributed to disastrous consequences at the Shoreham plant, which was built but never operated due to fundamental issues relating to the emergency plan. 68/
To address this problem, NRC approved modifications to the license approval process and adopted a combined construction and operation application process. The combined construction and operation application process (also known as "COL") essentially takes the previous two-step review process down to one step. In so doing, many significant issues like emergency planning, management qualifications and environmental impact are addressed before construction rather than later when the owner of the proposed plant will have made most of its capital investment. 69/ Under this approach, NRC approves and issues a license to build and operate a new nuclear power plant before commencement of construction. Upon issuing a combined license, NRC still must verify that the licensee completed all required inspections, tests and analyses and that acceptance criteria were met. Once a notice of intended operation is published in the Federal Register, which is required at least 180 days before the dates scheduled for initial fuel loading, there is limited opportunity for a hearing. At this stage, NRC will afford a hearing only if the petitioner demonstrates that the licensee has not met or will not meet the acceptance criteria. 70/
To test the COL process, DOE in 2005 initiated two new nuclear plant licensing demonstration projects through applications filed by a consortia of electric utilities. These consortia included power companies currently operating more than two-thirds of U.S. nuclear power plants and were assembled to share the significant costs and resulting knowledge of the application process. 71/ The first application promulgated under this project is expected to be filed this year by a consortium led by Dominion Resources for the North Anna (Virginia) site. A second application by a consortium led by NuStart Energy Development is expected to be filed by early 2008. 72/
Thirty applicants for new plants are expected this year. 73/ A number of generating companies and utilities also have announced intentions to file COL applications next year. They are Progress Energy, for its Harris Nuclear Plant near New Hill, North Carolina, and another for a not-yet-reported site in Florida; UniStar Nuclear (a joint venture of Areva and Constellation Energy) for a site at Calvert Cliffs, Maryland; South Carolina Electric and Gas for its V.C. Summer Nuclear Station in Fairfield County, South Carolina; Duke Energy, intending to submit applications for two unreported sites; and Southern Nuclear Operating Co. for its Alvin W. Vogtle Electric Generating Plant near Waynesboro, Georgia.
While the NRC has certified plant designs in the past, these COL applications will be the first to include advanced nuclear pre-certified designs. The streamlined regulatory review processes, long in print but just now being tested, are intended to facilitate the regulatory process and build confidence in an industry impacted in the past by licensing delays. There will be considerable focus on whether these regulatory changes as well as the new government subsidies and incentives will be effective in ensuring a more cost effective process for bringing safe and efficient new plants on line in a reasonable time frame.
Industry Improvements: In Construction and Contracting
Nuclear industry participants have an important role in reducing the amount of time it takes from the first concrete power to operation. With the trend toward deregulation of electric power, many utilities compete to recoup costs from market-based rates. But even in states holding to the traditional regulated rate-base system, there are no guarantees that utilities can successfully pass on their capital costs to consumers in the form of higher rates. While the existing fleet of nuclear plants is largely made up of one-of-a-kind, custom-built plants, the next generation of plants will need to take advantage of repeatable, standardized designs and construction processes in order to be viable in today's competitive energy market.
Standardized designs of nuclear engineering, as well as of balance of plant operations, offer opportunities for the reduction of costs through economies of scale and the efficiencies derived from the learning curve. As previously mentioned, modular construction (e.g., large, standardized components assembled off-site) is thought likely not only to lower costs but also to improve quality control and shorten field construction schedules. 74/ Data sharing is another industry development that likely will facilitate system installation and performance testing with the ultimate goal of reducing the critical time to market. 75/
Beyond hardware and software developments, innovations in contracting offer the potential to reduce uncertainty for new nuclear plants. For reactor projects involving standardized designs, interested parties will benefit from finding more efficient means of allocating risk. Rather than assign the owner/utility all of the financial risk for construction, as was typical when an owner contracted directly with a vendor and contractor to build a one-of-a-kind nuclear plant, owners likely will look to equipment vendors to share more risk, particularly in the case of vendors of standardized, pre-certified reactor designs. 76/ It can be argued reasonably that such a risk-sharing arrangement is appropriate in the case of a vendor that is providing the standardized design and that is better able to control risks associated with its application. In the final analysis, such risk-sharing improves the prospects for new nuclear projects and will, therefore, likely be part of the commercial structure that will produce new plant construction in the future.
The message from academia, administrative agencies and the industry is that a new nuclear renaissance, sustainable beyond the first few plants that are bolstered by government support, will depend on early demonstrations of success and, thus, a learning curve for untested regulatory and construction processes that must be relatively short. It will be incumbent on the industry to adopt processes and commercial structures that are best suited for early demonstrations of success. Regulatory simplification, design standardization, and risk- and information-sharing likely will be critical elements of a system that has the best chance for such success.
Impediments to Nuclear Resurgence
Waste Disposal
Proponents of advanced nuclear power plants make a convincing case for the necessary role of nuclear power in expanding and diversifying the nation's electricity supply. But the domestic U.S. industry likely still is years from breaking ground on the first new nuclear plant in the United States. Besides the significant capital investment and uncertain delays for getting new plants to market, another major impediment is the enduring problem of spent nuclear fuel. Yucca Mountain is years behind schedule, decades beyond the federal government's promise to take possession of fuel, and still could face cancellation because of political pressures. 77/ The government recently has announced that a best-achievable schedule for acceptance of nuclear waste now is 2017. 78/ DOE unapologetically tables the issue in its recent reports analyzing deployment of new nuclear plants in the near-term or within the next decade. 79/ In, A Roadmap to Deploy New Nuclear Power Plants in the U.S. by 2010, DOE acknowledges:
Long term disposition of SNF [spent nuclear fuel] is a legacy issue - a significant matter of national policy. It affects nuclear fuel supply, use of natural resources and land, and it involves very significant cost. However, resolution of this long-term strategic issue is not a prerequisite to new plant construction. 80/
Spent fuel management is a long-term government responsibility that will require difficult political and societal decisions regarding land use, nuclear fuel resources and spent nuclear fuel transportation. 81/ It is a goal for the next generation of nuclear reactors, the Generation IV reactors - those to be deployed over a 30-year timeframe - "to minimize and manage their nuclear wastes and notably reduce the stewardship burden in the future, thereby improving protection of the public health and environment." 82/ However, Generation III+ plants - those plants contemplated by the Energy Act of 2005 to be put into operation within the next 10 years - will generate waste that must be accommodated by existing disposal and storage facilities.
Being bullish on nuclear waste has merit from a financial standpoint, as well as an environmental one, when considering the trade-off with carbon-emitting technologies but likely will have loud detractors from industry as well as public interest groups. The "once-through" fuel cycle - whereby fuel is used once and then considered waste - employed in the United States results in thousands of metric tons of hot, highly radioactive spent nuclear fuel a year. What to do with the waste has troubled state and federal authorities since the 1950s.
Congress addressed the issue with the Nuclear Waste Policy Act in 1982 (NWPA). The NWPA gave the federal government the responsibility to take and dispose of spent nuclear fuel at the expense of utilities. 83/ Utilities have poured billions into the Nuclear Waste Fund for a federal repository as provided by the NWPA, spent many millions to construct and maintain on-site storage facilities in the interim and have spent many millions more in court arguing over the government's failure to live up to its promises.
On-site storage was supposed to be a temporary solution until the federal government took possession. As the stockpiles grew, state governments began to fear that these facilities might become permanent waste dumps. In response, many state governments began passing legislation severely restricting the size and amount of spent nuclear fuel that could be kept on site. 84/ Over a long and bumpy road of litigation, courts in the last few months have awarded utilities damages for the federal government's breach of contract for failing to take possession of spent nuclear fuel.
The NWPA authorized the Energy Secretary to enter into contracts with nuclear power plants across the country for the acceptance, transportation and long-term storage of their stockpiles of high-level waste. DOE used a standard contract with utilities requiring nuclear power plants to pay a one-time fee based on the amount of electricity they had produced up to the time of the contracting as well as an ongoing fee based on the amount of electricity they would produce in the future. In return for the payment of fees, DOE was to dispose of the high-level radioactive waste or spent nuclear fuel. 85/ The NWPA prohibited NRC from renewing the operating license of any producer that had not entered into the contract or was not actively negotiating in good faith with DOE for such a contract. By 1995, DOE became certain that it could not meet is obligation. It announced that it had become apparent that neither a repository nor an interim storage facility would be available by the statutory deadline of January 31, 1998, and that DOE would not begin disposing of spent nuclear fuel until 2010 at the earliest. Once it became clear that DOE would miss the deadline, the utility companies filed suit for breach of contract. To date, 66 such claims have been filed. 86/
At first, DOE denied having any contractual or statutory obligation to dispose of spent nuclear fuel pending construction and licensing of a permanent repository. 87/ The first cases brought before the deadline successfully challenged this interpretation and established DOE's liability. 88/ The utilities then sought a writ of mandamus from the U.S. Circuit Court of Appeals for the District of Columbia to compel DOE to perform. That relief was not granted, and the utilities were directed to submit to dispute resolution under the contract. 89/ In parallel decisions decided simultaneously by the same judges in Maine Yankee Atomic Power Co. v. United States 90/ and Northern States Power Co. v. U.S. Department of Energy 91/, the U.S. Court of Appeals for the Federal Circuit, finding that remedies for delays in performance as outlined in standard contract were inappropriate and inadequate, freed utilities to sue for money damages for breach of contract rather than resort to the internal dispute resolution scheme of the standard contract. Six years after Maine Yankee and Northern States Power, the Court of Federal Claims generally has dismissed claims of future damages without prejudice for being too speculative and only allowed claims for damages actually incurred as of trial. 92/ Awards to utilities have been announced in two cases, both of which are on appeal in the U.S. Court of Appeals for the Federal Circuit at the time of this publication.
In the first, Yankee Atomic Electric Co. v. United States 93/, the Court of Federal Claims entered judgment for each of three nuclear utilities, Yankee Atomic Electric ($33 million), Connecticut Yankee ($34 million) and Maine Yankee ($76 million) for some but not all of their spent fuel storage costs incurred as mitigation expenses because of the failure of the federal government. All three recovered construction costs for the on-site facilities built to house their spent fuel; Connecticut Yankee and Maine Yankee also recovered costs of reracking fuel assemblies in their storage pools to accommodate additional spent fuel.
In Yankee Atomic, the court also addressed the issue of whether a utility could recover costs associated with the use of fuel storage casks that were designed for both storage of the fuel and for the transport of the fuel once the federal government completed the final storage facility. These casks, known as dual purpose casks, involved added expenses to those utilities that moved forward with dry storage facilities in the face of the federal government's continuing delays in completing the final storage facility. In Yankee Atomic, the court found that use of dual storage casks was both foreseeable and reasonable. Earlier in 2006, another Court of Federal Claims judge found just the opposite and denied damages to a California utility for the same casks. On reconsideration following the Yankee Atomic decision, the court in Sacramento Municipal Utility District v. United States 94/ found no error in its earlier decision as to the dry storage casks but did find that the utility established entitlement to approximately $40 million in damages. 95/ Declining to follow Yankee Atomic, the court in the Sacramento case restated that "SMUD's decision to utilize 'dual purpose' dry storage was unreasonable" and "not reasonably foreseeable by the Government when Standard Contract was entered into in 1983." 96/ Notably, the Sacramento court found that documents used in Yankee Atomic and noticed in Sacramento were "created after [the contract date] and "are either drafts or are highly speculative or contingent in nature." 97/ As noted, parties in both cases have filed appeals. A trial on damages in a third case, System Fuels, Inc. v. United States 98/, was scheduled to begin in February, 2007.
How far do these cases advance the positions of the utilities that will continue to store spent fuel on-site at least for another 10 years? Most utilities likely would have preferred performance to damage awards. 99/ And, with immediate recovery of future damages forestalled, recovery of actual damages will entail renewed and ongoing litigation until Yucca Mountain accepts spent fuel or alternate solutions are worked out.
One alternate solution came in the form of a settlement agreement in 2000. Just before the Federal Circuit rendered its decisions in Maine Yankee and Northern States Power, DOE entered into a settlement agreement with PECO Energy Co. (Pennsylvania's largest utility and now part of Exelon Corp.) that was intended to serve as a model for other utilities in cases of breach of the standard contract. 100/ Under the settlement agreement, in exchange for giving up its contract claim, Exelon would receive credits against the ongoing per kilowatt-hour payments that it would otherwise pay into the NWF. As stated in the settlement documents, "the agreement allows PECO to reduce the projected charges paid into the Nuclear Waste Fund up to $80 million over 10 years to reflect costs reasonably incurred by PECO due to the department's delay." 101/ In addition, DOE would take title to the utility's spent fuel, including the dry storage facilities. The second part of the agreement would permit Exelon to remove the spent fuel liabilities from its corporate books, allow it to safely decommission its plants and relieve the utility of pressure from state regulators because the waste would become property of the federal government. Other utilities promptly challenged the agreement as an unauthorized use of Nuclear Waste Funds.
In Alabama Power Co. v. United States Department of Energy 102/, the 11th Circuit U.S. Circuit Court of Appeals determined that an offset against future payments was indistinguishable from a direct payment of NWF monies and therefore was unauthorized by the terms of the NWPA. 103/ Alabama Power, however, invalidated only the part of the agreement providing credits for future fees. In 2004, Exelon announced that it had reworked its $80 million settlement agreement. 104/
So, even with damage awards or settlement agreements, nuclear utilities remain obligated to store spent fuel by-products and must continue to pay into the NWF for the indefinite future. Interim storage solutions, to accommodate waste until Yucca Mountain or another facility if Yucca is permanently stalled, include temporary federal sites and privately owned facilities. The prospects of a federal off-site facility are unpredictable but seem unlikely in the near term, given the status of Yucca Mountain. And the fate of privately owned facilities likewise is not promising considering the failed efforts to locate such a facility on Indian land.
Private Fuel Storage, LLC, a consortium of eight electric utilities, contracted with the Skull Valley Band of the Goshute Indians to build an above-ground nuclear waste repository at the Skull Valley Goshute Indian Reservation in Utah to temporarily store roughly half of the nation's spent fuel. Following numerous unsuccessful legal challenges 105/, NRC approved the license in 2005. In the face of strong political opposition, the federal Bureau of Land Management on September 7, 2006, rejected transportation plans for shipping waste to the site (application to use public lands to construct and operate a rail line), and the federal Bureau of Indian Affairs rejected the lease agreement. 106/ Going forward, new nuclear power plants will have to accommodate spent fuel on-site until Yucca Mountain is available and/or until the United States adopts fuel reprocessing technologies. 107/
Without a doubt the best solution to nuclear waste is a change in the fuel cycle to recycle and reuse spent fuel. Recycling used fuel instead of direct disposal would significantly reduce the volume, thermal output and radiotoxicity of the waste produced requiring disposal in a geologic repository. 108/ According to Office of Civilian Radioactive Waste Management Director Edward F. Sproat III, 55,000 metric tons of spent nuclear fuel and high-level waste is being stored at more than 100 above-ground sites in 39 states, and that number grows by about 2,000 metric tons annually. 109/ Although Congress is considering legislation that would raise the 77,000 metric ton cap on capacity at Yucca Mountain, disposal capacity several times that will be needed to dispose of used fuel before the end of the century if recycling technologies are not employed. 110/
The once-through fuel cycle used in the United States and several other countries only extracts about 1 percent of the energy content in the original uranium ore. 111/ The promise of multiple-through cycles is the polar opposite: Less than 1 percent of transuranics end up in high level waste. France and Britain effectively reprocess spent nuclear fuel using the PUREX (plutonium-uranium extraction) process. 112/ Areva, France's national nuclear company, is the world's main player in the reprocessing of spent nuclear fuel. 113/ With the PUREX process, used fuel is dissolved in acid to extract pure plutonium and uranium, with the remaining material being waste. Two concerns with this process are that the remaining waste is highly toxic and that the process doesn't work on all fuel types. 114/ The overwhelming concern with this process - and the one historically driving the United States' resistance to reprocessing spent nuclear fuel in general - is that the pure plutonium extracted from the spent fuel can be used to make nuclear weapons. The largest stores of surplus commercial plutonium extracted from spent fuel rods are at Sellafield in Britain and La Hague in France. 115/ The combined stock at those sites is enough to make more than 20,000 nuclear bombs. 116/ Citing such statistics and noting the continuing fear of nuclear terrorism, some commentators say it is doubtful that reprocessing systems, like those used internationally, would survive congressional scrutiny. 117/ As earlier indicated, DOE is working toward such a solution in the long-term that includes multi-cycle fuel strategies consistent with the nation's nuclear nonproliferation policy.
Building from recommendations from the National Energy Policy and part of President Bush's Advanced Energy Initiative released in February 2006 118/, the Global Nuclear Energy Partnership (GNEP) is a program to address spent nuclear fuel, eliminate proliferation risks and expand the availability of nuclear energy. With an overarching purpose to enhance energy security, the principle aims of GNEP are to develop technology to reprocess spent nuclear fuel in a way that renders the plutonium usable for fuel but not weapons, to design modern safeguards directly into the planning and building of new nuclear systems and fuel cycle facilities to make monitoring more efficient, and to create a fuel management system that segregates the fuel suppliers/processors from the fuel buyers. 119/
DOE reports that its next step in establishing separation strategies in the United States is to partner with industry to investigate "the interest and ability of industry to deploy an integrated recycling capability consisting of two facilities: 1) a nuclear fuel recycling center capable of separating the usable components contained in light water spent fuel from the waste products; and 2) an advanced recycling reactor capable of consuming those usable products from the spent fuel while generating electricity. 120/ U.S. national labs would design and direct a third component, an advanced fuel cycle research facility. It would use modular, flexible construction techniques with near-term priority given to fabrication and qualification of fuels for an advanced fast reactor. If support for the program continues, GNEP will construct demonstration systems within the next 10 to 15 years. 121/
Despite the clear momentum from the administration and the nuclear industry to expand the United States' fleet of nuclear power plants, additional impediments need to be addressed. In the post-9/11 world, the vulnerability of nuclear power plants and spent fuel storage facilities is a significant concern. The prospect of a terrorist attack on the proposed above-ground fuel facility was prominent in the efforts to block the Skull Valley project. Security threats will certainly play a role in public opinion of any new nuclear facility development. In the past, public opposition to nuclear power has caused significant licensing and construction delays at substantial cost.
Public Opinion
Proponents of expanded nuclear power can cite a number of polls in the last year reporting increases in public support. One example is a March 2006 Gallup poll that shows a majority of Americans - 55 percent up from 43 percent in March 2003 - support "expanding use of nuclear energy" as an environmental proposal. 122/ Nuclear opponents argue that the "renaissance" is illusory - and more a product of successful industry lobbying of a sympathetic administration than a sign of renewed interest from investment sector, much less the public. On the environmental front, however, some leaders are getting behind nuclear as the lesser evil to address global warming. 123/ Others hold firm that the environmental and security issues have not abated, arguing that we are no closer to safely managing the waste issue, for one, than we were 30 years ago. 124/ As to the solid safety record demonstrated in the last decade, opponents suggest that safety risks will increase as nuclear plants age. 125/ Still others take a different tack - that cleaner, safer alternative such as energy efficiency, wind, biomass and solar power can be made operational sooner and more cheaply than nuclear power. 126/
Given the concerns about public opposition, site options for new nuclear plant construction are focusing on the South, where opposition is thought to be less. 127/ The nuclear industry knows only too well the effectiveness of public opposition in delaying and halting ongoing projects and that such factors should not be underestimated.
Shortage of Qualified Personnel
Another significant concern for the next generation of nuclear plants is whether there is large enough pool of qualified personnel to construct and manage the systems. According to a 2005 DOE study, "hiring the highly-skilled and highly valued construction workers needed to build nuclear units is expected to be a challenge. This is the practical consequence of no real growth in the nuclear industry for many years." 128/ A Nuclear Energy Institute study in 2001 determined that the industry's craft workers would dwindle within 15 years. The study helped establish what has become the Center for Energy Workforce Development in an attempt to enhance the nuclear labor force. 129/ Workforce estimates for the Southeast and Gulf Coast, where the first plants are targeted, are expected to peak at 9,000 in 2013. 130/ In response to the concern over the declining domestic nuclear expertise, the Energy Act contains provisions to strengthen university training in nuclear science and engineering support. Those provisions, however, will not address the problem in the near-term. 131/ In the near term, the pursuit of the next generation of plants will require that the U.S. industry compete for the available workforce in a global market where the most recent experience resides overseas.
Conclusion
Without question, public policy has moved dramatically toward the promotion and facilitation of a new generation of domestic nuclear power plants. The Energy Act and new, more streamlined NRC license approval processes have created new incentives for and have removed previous barriers to the development of new nuclear power plants.
Working in concert with these developments, the nuclear industry has itself improved its image and moved, with common sense, to facilitate new plant development through standardized designs, cooperation on joint regulatory applications, and increased risk- and information-sharing among industry participants.
And while events affecting traditional fossil fueled plants have made nuclear power relatively more attractive, significant impediments remain. The nuclear waste issue has yet to be resolved on a long-term basis. Public opinion remains guarded, the regulatory process is untested and domestic expertise in the development of a new generation of nuclear plants is in short supply.
Yet the momentum would appear to be on the side of significant movement toward the domestic development of new nuclear plants. The ultimate recovery of the domestic nuclear industry, however, will depend largely on the ability of the initial plants to avoid the disastrous cost overruns, intractable regulatory delays and operational problems that beset its past. The industry's recovery will depend significantly on the ability of the initial plants to establish credibility on cost, regulatory approvals and operational performance. This will be a significant challenge for an industry whose domestic expertise has declined while new plant construction has been dormant.
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ENDNOTES
| 1/ | Lewis L. Strauss, address to the National Association of Science Writers (September 1954).
|
| 2/ | Nuclear Energy Institute, Nuclear Facts (2007).
|
| 3/ | Arjun Makhijani, Atomic Myths, Radioactive: Realities: Why Nuclear Power Is a Poor Way to Meet Energy Needs, 24 Journal of Land Resources and Environmental Law 61 (2004).
|
| 4/ | Energy Information Administration, Basic Nuclear Statistics, available at www.eia.doe.gov/neic/
quickfacts/quicknuclear.html (last visited February 20, 2007).
|
| 5/ | At the time of publication, the Tennessee Valley Authority's Browns Ferry Unit 1 reactor, dormant for more than a decade, was on schedule to restart in 2007.
|
| 6/ | Business Case for New Nuclear Power Plants (October 1, 2002), available at www.ne.doe.gov/home/bc/
ExecOverviewNERAC100102.pdf
|
| 7/ | Dennis E. Beller, Atomic Time Machines: Back to the Nuclear Future, 24 Journal of Land Resources and Environmental Law 41, 47 (2004).
|
| 8/ | Business Case for New Nuclear Power Plants (October 1, 2002), available at www.ne.doe.gov/home/bc/
ExecOverviewNERAC100102.pdf
|
| 9/ | Nuclear Energy Institute, Nuclear Facts (2007).
|
| 10/ | Energy Information Administration, U.S. Nuclear Reactors, available at www.eia.doe.gov/cneaf/nuclear/
page/nuc_reactors/reactsum.html (last visited February 9, 2007).
|
| 11/ | Nuclear Regulatory Commission, Backgrounder: Reactor License Renewal (January 2007).
|
| 12/ | Nuclear Regulatory Commission, Reactor License Renewal Regulations, available at www.nrc.gov/reactors/operating/
licensing/renewal/regulations.html
|
| 13/ | 10 CFR Part 54. See also, Nuclear Regulatory Commission, Reactor License Renewal Regulations, available at www.nrc.gov/reactors/operating/
licensing/renewal/regulations.html
|
| 14/ | Nuclear Power Plant License Renewal Revisions, 60 Federal Register 22461 (May 8, 1995).
|
| 15/ | Nuclear Regulatory Commission, Backgrounder: Reactor License Renewal (January 2007).
|
| 16/ | Nuclear Regulatory Commission, Fact Sheet: Power Uprates for Nuclear Plants (July 2004).
|
| 17/ | Nuclear Regulatory Commission, Fact Sheet: Power Uprates for Nuclear Plants (July 2004).
|
| 18/ | Nuclear Regulatory Commission, Fact Sheet: Power Uprates for Nuclear Plants (July 2004).
|
| 19/ | Energy Information Administration, Basic Nuclear Statistics, available at www.eia.doe.gov/neic/
quickfacts/quicknuclear.html
|
| 20/ | Business Case for New Nuclear Power Plants (October 1, 2002), available at www.ne.doe.gov/home/bc/
ExecOverviewNERAC100102.pdf
|
| 21/ | Nuclear Energy Institute, Nuclear Facts (2007).
|
| 22/ | Mike Stuckey, New nuclear power "wave" - or just a ripple? MSNBC.com (January 23, 2007), available at www.msnbc.msn.com/id/16272910
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| 23/ | Department of Energy, Office of Nuclear Energy, The U.S. Generation IV Fast Reactor Strategy, 1, 5 (December 2006).
|
| 24/ | W. Conrad Holton, Power Surge: Renewed Interest in Nuclear Energy, 113 Environmental Health Perspectives A749 (November 2005).
|
| 25/ | W. Conrad Holton, Power Surge: Renewed Interest in Nuclear Energy, 113 Environmental Health Perspectives A749 (November 2005).
|
| 26/ | Department of Energy, DOE NP2010 Nuclear Power Plant Construction Infrastructure Assessment, 2-1 (October 21, 2005).
|
| 27/ | National Energy Policy, Report of the National Energy Policy Development Group, Overview (May 2001), available at www.whitehouse.gov/energy/
|
| 28/ | National Energy Policy, Report of the National Energy Policy Development Group, 1, 5-10 (May 2001), available at www.whitehouse.gov/energy/
|
| 29/ | National Energy Policy, Report of the National Energy Policy Development Group, 1, 5-17 (May 2001), available at www.whitehouse.gov/energy/
|
| 30/ | Department of Energy, Office of Nuclear Energy, Nuclear Power 2010 (January 2006), available at www.gnep.energy.gov/pdfs/NP2010.pdf
|
| 31/ | See, e.g., Department of Energy, A Roadmap to Deploy New Nuclear Power Plants in the U.S. by 2010 (October 21, 2001); Business Case for New Nuclear Power Plants (October 1, 2002), available at www.ne.doe.gov/home/bc/
ExecOverviewNERAC100102.pdf
|
| 32/ | Department of Energy, A Roadmap to Deploy New Nuclear Plants in the U.S. by 2010, 1, 4 (October 21, 2001).
|
| 33/ | See, e.g., National Energy Policy, Report of the National Energy Policy Development Group, 5-16 (May 2001), available at www.whitehouse.gov/energy/
|
| 34/ | Department of Energy, A Roadmap to Deploy New Nuclear Plants in the U.S. by 2010, 1, 4 (October 21, 2001).
|
| 35/ | University of Chicago, The Economic Future of Nuclear Power (August 2004) [findings summarized at Department of Energy, Nuclear Power Competitive with Coal and Natural Gas (September 20, 2004), available at www.energy.gov/news/1500.htm]
|
| 36/ | University of Chicago, The Economic Future of Nuclear Power (August 2004) [findings summarized at Department of Energy, Nuclear Power Competitive with Coal and Natural Gas (September 20, 2004), available at www.energy.gov/news/1500.htm]; Thomas F. Armistead, New Realities Bring About a Construction Climate Change, Engineering News-Record, September 18, 2006, at 30, 36.
|
| 37/ | University of Chicago, The Economic Future of Nuclear Power (August 2004) [findings summarized at Department of Energy, Nuclear Power Competitive with Coal and Natural Gas (September 20, 2004), available at www.energy.gov/news/1500.htm]
|
| 38/ | Department of Energy, A Roadmap to Deploy New Nuclear Plants in the U.S. by 2010, 1,5 (October 21, 2001).
|
| 39/ | Energy Policy Act of 2005, Pub.L. 109-58, 119 Stat. 594 (2005).
|
| 40/ | Energy Policy Act §1703.
|
| 41/ | Energy Policy Act §1702.
|
| 42/ | Mike Schoen, Does nuclear power now make financial sense? MSNBC.com (January 26, 2007), available at: www.msnbc.msn.com/id/16286304
|
| 43/ | Internal Revenue Bulletin 2006-18 (May 1, 2006), available at www.irs.gov/pub/irs-irbs/irb06-18.pdf
|
| 44/ | Internal Revenue Bulletin 2006-18 (May 1, 2006), available at www.irs.gov/pub/irs-irbs/irb06-18.pdf
|
| 45/ | "Pre-operational hearings" are NRC hearings conducted after the issuance of a combined license that would result in an NRC stay of construction or initial fuel load. 10 CFR §950.3 (2006); 71 Federal Register 46323 (August 11, 2006).
|
| 46/ | Energy Policy Act §638.
|
| 47/ | Secretary Bodman Announces Federal Risk Insurance for Nuclear Power Plants and Touts Robust Economy (August 4, 2006), available at www.energy.gov/news/3899.htm (last visited March 23, 2007).
|
| 48/ | 10 CFR §950.12 (2006).
|
| 49/ | 10 CFR §950.14 (2006).
|
| 50/ | 10 CFR §950.20-28 (2006).
|
| 51/ | 10 CFR §950.30-37 (2006).
|
| 52/ | 10 CFR §950.40-42 (2006).
|
| 53/ | In the Interim Rule, DOE sought comments on whether generating companies should be allowed to take part in multiple incentive programs. The Final Rule does not limit eligibility for Standby Support. One plant is eligible for all of the incentives programs under the Energy Act. 71 Federal Register 46308 (August 11, 2006).
|
| 54/ | See, 71 Federal Register 46321 (August 11, 2006).
|
| 55/ | See, 71 Federal Register 46321 (August 11, 2006).
|
| 56/ | Energy Policy Act §602.
|
| 57/ | Nuclear Regulatory Commission, Fact Sheet: Nuclear Insurance and Disaster Relief Funds (May 2005).
|
| 58/ | Joseph P. Tomain, Nuclear Futures, 15 Duke Environmental Law and Policy Forum 221, 227 (2004-2005).
|
| 59/ | Nuclear Regulatory Commission, Fact Sheet: Nuclear Insurance and Disaster Relief Funds (May 2005).
|
| 60/ | Energy Policy Act §625.
|
| 61/ | Business Case for New Nuclear Power Plants (October 1, 2002), available at www.ne.doe.gov/home/bc/
ExecOverviewNERAC100102.pdf
|
| 62/ | See, 10 CFR Part 52.
|
| 63/ | Nuclear Regulatory Commission, Backgrounder, Nuclear Power Plant Licensing Process (July 2005).
|
| 64/ | Nuclear Regulatory Commission, Backgrounder, Nuclear Power Plant Licensing Process (July 2005).
|
| 65/ | Nuclear Regulatory Commission, Backgrounder, Nuclear Power Plant Licensing Process (July 2005).
|
| 66/ | Nuclear Regulatory Commission, Backgrounder: Nuclear Power Plant Licensing Process (July 2005).
|
| 67/ | Thomas F. Armistead, New Realities Bring About a Construction Climate Change, Engineering News-Record, September 18, 2006, at 30, 31.
|
| 68/ | The Shoreham Nuclear Plant on New York's Long Island was first announced by Long Island Lighting Co. (LILCO) in 1965 and was expected to operate by 1973. Fierce public opposition and construction, design and regulatory delays resulted in the plant's delivery more than a decade late in 1984. With a price tag of $6 billion, the plant at that point had an NRC license only for low-power tests; its operating license could not be approved until an emergency evacuation plan, to be approved by then-New York Governor Cuomo, was submitted. The plan was never approved. Governor Cuomo negotiated a settlement with LILCO in 1989 to shutter the plant before it ever became fully operational. Shoreham was decommissioned in 1994. See, e.g., Dismantling of the Shoreham Nuclear Plant Is Completed, New York Times, October 13, 1994, at B6; Dan Fagin, Lights Out at Shoreham, www.newsday.com/community/guide/
lihistory/ny-history-hs9shore,0,563942.story; Energy Information Administration, Nuclear Power: 12 Percent of America's Generating Capacity, 20 Percent of the Electricity (March 5, 2003), available at: www.eia.doe.gov/cneaf/nuclear/
page/analysis/nuclearpower.html; In the Matter of Citizens for an Orderly Energy Policy, Inc. v. Cuomo, 78 N.Y.2d 398 (1991) [upholding settlement agreement providing for the Long Island Power Authority to acquire the Shoreham Plant, close it and pass on costs through rates to consumers and summarizing the history of the Shoreham plant]. For an in-depth review of the downfall of the Shoreham plant, see, David P. McCaffrey, The Politics of Nuclear Power: A History of the Shoreham Nuclear Power Plant (1991).
|
| 69/ | Thomas F. Armistead, New Realities Bring About a Construction Climate Change, Engineering News-Record, September 18, 2006, at 30, 31.
|
| 70/ | Thomas F. Armistead, New Realities Bring About a Construction Climate Change, Engineering News-Record, September 18, 2006, at 30, 31.
|
| 71/ | Department of Energy, Nuclear Power 2010 (January 2006), available at: www.gnep.energy.gov/pdfs/NP2010.pdf
|
| 72/ | Department of Energy, Office of Nuclear Energy, Current Projects, available at np2010.ne.doe.gov/
NP2010CurProjects.asp
|
| 73/ | Nuclear Energy Institute, Nuclear Facts (2007).
|
| 74/ | Thomas F. Armistead, New Realities Bring About a Construction Climate Change, Engineering News-Record, September 18, 2006, at 30, 31.
|
| 75/ | See, Thomas F. Armistead, New Realities Bring About a Construction Climate Change, Engineering News-Record, September 18, 2006, at 30, 32 for a description of tools in use.
|
| 76/ | Thomas F. Armistead, New Realities Bring About a Construction Climate Change, Engineering News-Record, September 18, 2006, at 30, 32.
|
| 77/ | A national geologic repository was authorized by the Nuclear Waste Policy Act of 1982, 42 USC 10101 et. seq. Congress and the President Bush approved Yucca Mountain as the nation's first geologic repository in 2002. See, Nuclear Energy Institute, Inc. v. EPA, 373 F.3d 1251, 1315 (D.C. Cir. 2004) [rejecting 10,000 year radiation standard as inconsistent with the National Academy of Science recommendations incorporated into §801(a) of the Energy Policy Act]; 70 Federal Register 67098-99 (Nov. 4, 2005) [extending public comment period on proposed amendment to NRC regulations to implement EPA's revised dose standard after 10,000].
|
| 78/ | Statement of Edward F. Sprout III, director Office of Civilian Radioactive Waste Management, Department of Energy, before the Subcommittee on Energy and Air Quality on July 19, 2006; Department of Energy, Office of Public Affairs, DOE Announces Yucca Mountain Application Schedule (July 19, 2006); but see, Yucca Director Downplays Schedule, in which Mr. Sproat states that the acceptance date is closer to 2020, available at www.yuccamountain.org/time.htm; System Fuels, Inc. v. United States, 73 Fed. Cl. 206, 208, n.2. (September 29, 2006) ["the viability of the government's plan to use Yucca mountain as its nuclear waste repository has been cast into doubt by the decision in Nuclear Energy Institute v. Environmental Protection Agency"].
|
| 79/ | See, Department of Energy, A Roadmap to Deploy New Nuclear Power Plants in the U.S. by 2010 (October 21, 2001).
|
| 80/ | Department of Energy, A Roadmap to Deploy New Nuclear Power Plants in the U.S. by 2010, 1, 10 (October 21, 2001).
|
| 81/ | Department of Energy, A Roadmap to Deploy New Nuclear Power Plants in the U.S. by 2010, 1, 10 (October 21, 2001).
|
| 82/ | Department of Energy, A Roadmap to Deploy New Nuclear Power Plants in the U.S. by 2010, 10, n.7 (October 21, 2001). See also, Department of Energy, Office of Nuclear Energy, The U.S. Generation IV Fast Reactor Strategy (December 2006).
|
| 83/ | Nuclear Waste Policy Act of 1982, 42 USC 10101 et. seq
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| 84/ | Pacific Gas & Electric Co. v. Energy Resources Conservation and Development Commission, 461 U.S. 190, 223 (1983). ["Nuclear safety standards are the prerogative of the U.S. and not subject to state demand for higher standards under the 1954 Amendments to Atomic Energy Act. [but] the legal reality remains that Congress has left sufficient authority in the States to allow the development of nuclear power to be slowed or even stopped for economic reasons."]. See also, Deborah Tussey, State Regulation of Nuclear Power Plants, 82 ALR3d 751.
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| 85/ | 42 USC §10222(a)(5)(B).
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| 86/ | PSEG Nuclear, L.L.C. v United States, 465 F.3d 1343, 1345 (Fed. Cir. 2006).
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| 87/ | Final Interpretation of Nuclear Waste Acceptance Issues, 60 Federal Register 21793-21794 (May 3, 1995).
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| 88/ | Indiana Michigan Power Co. v. Department of Energy, 88 F.3d 1272, 1277 (D.C. Cir. 1996) [NWPA confers an unconditional obligation to begin disposing of the utilities' spent nuclear fuel by January 31, 1998; DOE's final interpretation of nuclear waste acceptance issues vacated].
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| 89/ | Northern States Power Co. v. U.S. Department of Energy,128 F.3d 754, 758 (D.C. Cir. 1997) [denying writ of mandamus but precluding "unavoidable delays" clause argument in subsequent litigation]. In October 2006, the Court of Federal Claims held the District of Columbia Circuit's mandamus order void for lack of jurisdiction and opened the door for the unavoidable delay clause argument. Nebraska Public Power District v. United States, 73 Fed.Cl. 650 (2006). This order has been stayed pending certification of the issue to the U.S. Court of Appeals for the Federal Circuit on interlocutory appeal. Nebraska Public Power District v. United States, 2006 U.S. Claims LEXIS 397 (December 19, 2006).
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| 90/ | Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336 (Fed. Cir. 2000) [affirming summary judgment for utilities]. See also, PSEG Nuclear, L.L.C. v. United States, 465 F.3d 1343, 1348, 1351 (Fed. Cir. 2006) [reversing dismissal for lack of subject matter jurisdiction and holding that the Court of Federal Claims has jurisdiction under the Tucker Act to hear utilities' breach of contract claims].
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| 91/ | Northern States Power Co. v. U.S. Department of Energy, 224 F.3d 1361 (Fed. Cir. 2000) [reversing dismissal in favor of DOE].
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| 92/ | See, Indiana Michigan Power Co. v. United States, 422 F.3d 1369, 1373 (Fed. Cir. 2005) [affirming trial court's dismissal of the utility's claim for damages for failing to prove foreseeability, causation and reasonableness]; Tennessee Valley Authority v. United States, 69 Fed. Cl. 515 (2006) [denying offsets for costs the utility did not have to spend because of DOE's breach as speculative]; Yankee Atomic Electric Co. v. United States, 73 Fed. Cl. 249, 326 (2006) [limiting claims to those actually incurred as of date litigation was initiated]; System Fuels, Inc. v. United States, 73 Fed.Cl. 206, 219 (2006) [granting leave to amend and supplement complaint to include damages incurred through the date the complaint was filed; plaintiff retained right to bring subsequent actions for damages later sustained].
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| 93/ | Yankee Atomic Electric Co. v. United States, 73 Fed.Cl. 249 (2006).
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| 94/ | Sacramento Municipal Utility District v. United States, 2006 U.S. Claims LEXIS 372 (December 1, 2006).
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| 95/ | Sacramento Municipal Utility District v. United States, 2006 U.S. Claims LEXIS 372 at *25 (December 1, 2006).
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| 96/ | Sacramento Municipal Utility District v. United States, 2006 U.S. Claims LEXIS 372 at *7 (December 1, 2006).
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| 97/ | Sacramento Municipal Utility District v. United States, 2006 U.S. Claims LEXIS 372 at *3 (December 1, 2006).
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| 98/ | System Fuels, Inc. v. United States, 73 Fed.Cl. 206, 219 (2006).
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| 99/ | See, e.g. Commonwealth Edison Co. v. United States, 56 Fed.Cl. 652 (2003) [rejecting takings argument by utility unable to redevelop former nuclear power plant site because of SNF stored on-site].
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| 100/ | First Agreement Reached with Utility on Nuclear Waste Acceptance (July 20, 2000), available at nuclear.gov/home/7-20-00.html (last visited March 6, 2007).
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| 101/ | First Agreement Reached with Utility on Nuclear Waste Acceptance (July 20, 2000), available at nuclear.gov/home/7-20-00.html (last visited March 6, 2007).
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| 102/ | Alabama Power Co. v. United States Department of Energy, 307 F.3d 1300 (11th Cir. 2002) [fee adjustment provided by agreement under which Exelon's NWF contributions is reduced is null and void].
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| 103/ | See also, Yankee Atomic Electric Co. v. United States, 73 Fed. Cl. 249, 326 (2006) ["Damages come from the Judgment Fund not the NWF"], citing Alabama Power v. United States Department of Energy, 307 F.3d 1300 (11th Cir. 2002).
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| 104/ | Exelon Announces Strong Third Quarter Earnings Despite Mild Summer; Increases Common Dividend by 31% (October 21, 2004), available at: www.exeloncorp.com/NR/exeres/
60EF0E77-EEEA-4909-9713-E85C542B08C3.htm:
On August 10, Exelon announced that Exelon and the U.S. Department of Justice, in close consultation with the U.S. Department of Energy, had reached a settlement under which the government will reimburse Exelon for costs associated with storage of spent fuel at the company's nuclear stations pending the DOE fulfilling its contractual obligation to accept commercial spent nuclear fuel. Under the agreement, Exelon received $80 million in gross reimbursements during the third quarter for storage costs already incurred, with additional amounts to be reimbursed annually for future costs. If a national repository opens by 2010 and the DOE begins accepting spent nuclear fuel as the DOE has said it would, gross reimbursements to Exelon would eventually total about $300 million (inclusive of the immediate $80 million gross reimbursement and net of approximately $43 million that Exelon must refund to the DOE for past credits to the NWF.)
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